Introduction:

The burning of Incense/Agarbatti in religious and social function has been

practiced in india since ancient times. Agarbatti an aromatic powder or paste on a
bamboo stick is burnt in Indian homes as a fragment fumigant and is reputed to
insecticiadal and antiseptic properties. Agarbatties are available in different colours
different perfumes. The burning time of an agarbatti can go from 15 minutes to 03
hours lower quality only charcoal powder or low quality sandalwood poder with a
mixture of 50-60 percent of wood gum powder. Cheap perfumes are also used to give
them a top note. In superior verieties, purified resins, essential oils, natural fixatives
like amber, musk and divet are used along with synthetic aromatics to improve its
quality.

Market:
Agarbatti is used by all communities and religious in india, Ceylon, Burma and
by Indians residing abord. As of today 85 foreign countries are using our agarbatties.
This industry is one of the abour intensive cottage types of industries in india and
right now Karnataka state leads in this industry, the main centre of manufacture
being mysore and bangaore due to easy availability of raw materieals. Moreover, it is
an export oriented industry and can be a good source of earning.

Process:
Al the ingredients in powder from are mixed well in the proper proporation
with water to a semi soid paste by skied labour. The raw sticks are then dried
properly and packed in suitable bundes depends on price and product offering. For
the manufacture of perfumed and raw agarbatties are dipped propery in dipping
trays. The perfumed agarbatties are packed immediaty in polythene bags and finaly in
printed cartons after proper labeling and branding.

Production Target:
Around 4560 quintals of bamboo sticks would be produced per year. This stics
would be a different size and would be sold at the rate of Rs.1,750/- per quintal. The
total sales would be around Rs.79,80,000/-.

Raw Materiels:
All the raw materiels are localy available which is a positive side follow starters.

Muli Bamboo Rs.99,000/-

Quality of Bamboo Rs.1,08,000/-
Printed Paper Box for Packaging of Rs.35,833/-
Incense sticks
Perfume, Chemicas etc Rs.78,000/-
Total Rs.3,20,833/-
Power:
At 200/200 volts, 50 Hz with AC single phase & 3 wire. The manufacturing unit
will need a total connected load of 5 KW. The annua consumption of power is
estimated at 10476 KWHrs costing Rs.20,657/-.

Water: The unit will need 550 Ltrs of Water. The Cost of drawing of water is shown in
power cost.

Manpower:
Apart from one skilled worker which can be recruited or trained the entire
manpower requirement is locally available. The number and annual cost of
manpower are given below.

Sl.No. Category of Manpower No. of Persons Annual Cost

1 Manager cum chief Chemist
2 Sales and Administrative Staffs
3 Skilled Worker (Trained)
4 Unskilled Worker
Total
1 Rs.78,000/-
2 Rs.84,000/-
1 Rs.60,000/-
2 Rs.60,000/-
6 Rs,2,82,000/-

Project Cost:
1. A) Land & Building Owned
B) Shed for office cum godown Rented
2. Machinary & Equipment
a) Bamboo cross cutting machine, Rs.1,05,000/-
bamboo forming machine & 0
equipment, drying tray
b) Hydrauic extruder & kneading M/c Rs.1,30,000/-
c) Incense stick polishing machine 1 Rs.35,000/-
No.
Sub Total Rs.2,70,000/-

d) Furniture & Fixtures Rs.75,000/-

e) Pre-operating Expenses Rs.25,000/-
3. Provision for contingencies Rs.20,000/-
4. Preliminary & Pre operative Rs.20,000/-
Expenses

Total Fixed Capital Rs.4,10,000/-

5. Working Capital (for 3 Months)

 a) Raw Materials Rs.3,20,833/-
b) Power Rs.1,721/-
c) Salary & Wages Rs.23,500/-
d) Miscellaneous Expenses Rs.3,946/-
Total Project Cost Rs.7,60,000/-

Profitability: (Rs. In Thousands)

Sl. No. Description 1st Year 2nd Year 3rd Year 4th Year 5th Year
1 Capacity 60% 70% 80% 80% 80%
Utilized
2 Annual Sales 3,456 4,032 4,608 4,608 4,608
Realization
3 Annual Cost in
Rs.
a) Raw Materials 2,310 2,695 3,080 3,080 3,080
b) Power 12 14 17 17 17
Wages & 282 289 296 296 296
c) Saaries
Repair & 16 16 16 16 16
d) Maintenance
Administrative 75 79 83 87 91
e) overheads
Selling 518 605 691 691 691
f) Expenses
Description 40 40 40 40 40
g)
Intrest 61 49 36 22 7
h)
3,314 3,787 4,259 4,257 4,253

Annual Profit 142 245 349 351 355

4)
Return on 18.68% 32.24% 45.92% 46.18% 46.71%
5) Investment
Return on 4.11% 6.08% 7.57% 7.62% 7.70%
6) Sales
Cash accrual 182 285 389 391 395
7)
Annual
8) Contribution
Break Even
9) Point in
 Percent
Debt servicing
10) Capacity